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False Advertising, Lanham Act

Unilever Gets Egg On Its Face: Maker of Hellmann’s Sues Upstart Hampton Creek for False Advertising

Unilever, the maker of Hellmann’s Mayonnaise, has filed a lawsuit in New Jersey federal court against Hampton Creek foods over a competing product called Just Mayo. As many folks know, Hampton Creek is a food start-up focused on making plant-based alternatives to everyday foods. So far, they have launched two products: Just Mayo and Just Cookie Dough, neither of which contain eggs. And this fact – the absence of eggs – is at the heart of the lawsuit: Unilever alleges that the advertising and marketing of Hampton Creek’s Just Mayo is deceptive and misleading because it uses the term mayo but does not contain eggs. According to Unilever, by marketing their product under the name Just Mayo, Hampton Creek is violating the federal Lanham Act and New Jersey state consumer protection laws.

Unilever’s case is based on the following core premise: Mayonnaise, as defined under federal law, is a mixture of vegetable oil, an acidifying ingredient such as vinegar and some form of eggs. Because Just Mayo does not contain eggs, it is not mayonnaise at all and – therefore – Hampton Creek is deceiving customers.

Let’s start with food law. Federal regulations define a variety of foods, including mayonnaise. Unilever places a great deal of weight on the definition of mayonnaise found at 21 C.F.R. § 169.140 and acts as if this is an open and shut case. But the federal definition of mayonnaise is not dispositive. Unilever’s case involves some improper conflation of two separate worlds: government regulation and private litigation. Take government regulation: The question of whether or not Hampton Creek’s labeling of Just Mayo violates any applicable FDA regulations is not at issue. There is no private right of action for a violation of FDA regulations. And on that point, I’d note that federal law does not define “mayo” as opposed to “mayonnaise.”

Rather, the claims at issue are false advertising claims. Under either federal or state law, Unilever will have to establish (1) that Hampton Creek’s statements – its advertising; its labeling – are literally false or (2) that Hampton Creek’s statements are likely to mislead, confuse or deceive consumers.

Unilever’s complaint goes hard at the first prong, arguing that the advertising of Just Mayo – and particularly the name Just Mayo itself – is literally false and therefore a clear violation of the Lanham Act. To aid in making its point, Unilever’s complaint contains several images of jars of Just Mayo designed to show (1) that Hampton Creek is using the name Just Mayo and (2) that Just Mayo does not contain eggs. For instance, the complaint contains the following images:

jm1                             jm2

Based on all of this, Unilever concludes:

Hampton Creek’s false labeling, and its false claims that Just Mayo is “mayonnaise” or “mayo” are part of a larger scheme of false advertising and unfair competition aimed at Unilever’s market leading mayonnaise brands…

It’s all one, giant Hellmann’s hating conspiracy! This is literally false mayonnaise advertising– case closed, right?

Not so fast. Although I am not a food lawyer, I have litigated a number of cases under the Lanham Act. When evaluating whether an advertisement is literally false, a court must analyze the message conveyed within its full context. This principle is well-established. In addition, there are other corollary principles: Only an unambiguous message can be literally false. If an advertisement is susceptible to more than one reasonable interpretation, then a court cannot conclude that an advertisement is literally false. Instead, a plaintiff can still make out a claim for false advertising, but only by showing actual consumer deception or confusion.

So, let’s apply this framework to the instant dispute: Take the name Just Mayo, as it appears on jars of the product. The court must analyze this entire message – basically the entire label – in full context and determine if it is literally false. And this is where Unilever gets too clever by half. The complaint contains a number of pictures of jars of Just Mayo. But the pictures used in the complaint do not tell the whole story and – in my view – are almost deceptive by virtue of their omissions. For instance, each jar of Just Mayo contains a section of the label that looks something like this:

                     jm3

That’s right. Each jar of Just Mayo clearly and conspicuously advertises the fact that the product is vegan and EGG FREE! In fact, on some jars, these things are touted as the benefits of Just Mayo.

When you piece all of this together – the name Just Mayo, the Hampton Creek logo of an egg with a plant superimposed over top of it, the list of ingredients, the fairly prominent disclosure that the product is vegan and contains NO EGGS – the most plausible interpretation of the advertisement as a whole is that Just Mayo is an egg free mayonnaise type product.

Here’s an example of a similar situation: MorningStar Farms makes “Chik’n Nuggets”. Chik’n is clearly variant of chicken just as mayo is variant of mayonnaise. The box of MoringStar Farms contains pictures of what look to be chicken nuggets. But Tyson Chicken isn’t suing MorningStar because everyone – at least everyone who can read – knows that MorningStar Chik’n Nuggets are vegetarian— because the box says so!

Bottom line: In my view, there is no way Unilever prevails through a showing of literal falsity. Instead, the case is going to come down to evidence of actual consumer confusion, which likely means a battle of consumer surveys and experts. And in spite of Unilever’s early claims about its own survey and its evidence of consumer confusion, I believe Hampton Creek has a strong chance of prevailing. The case will ultimately be decided by a jury. A jury will want to side with the good guys. In this case, both in my view and based on public reaction to the lawsuit, the good guys are Hampton Creek. A jury is going to look for any possible way to find in Hampton Creek’s favor.  And Hampton Creek along with its counsel Boies Schiller & Flexner will give the jury exactly that.

I admit that I am slightly biased because I know the CEO of Hampton Creek— we went to Cornell together and used to lift weights up on North Campus. And I started my career as a lawyer at Boies Schiller & Flexner– In my view, they are the best in the business. The case is Conopco Inc. d/b/a Unilever v. Hampton Creek Inc., Case No. 2:14 civ. 06856 (D.N.J. Oct. 31, 2014).

Jonathan Pollard is a trial lawyer and litigator based on Fort Lauderdale, Florida. He focuses his practice on defending non-compete and trade secret claims. Jonathan routinely represents doctors, corporate executives and other high level employees who are switching companies, or, who have started their own ventures. Beyond litigation, Jonathan advises employees, companies and business owners regarding restrictive covenant issues in connection with employment contracts, separation agreements, hiring decisions, the purchase or sale of business interests and the execution of commercial leases. Jonathan has been interviewed about non-compete issues by reporters from INC Magazine, the BBC, the National Federation of Independent Business and The Tampa Bay Times. In addition to his background in non-compete and trade secrets work, Jonathan has broad experience as a competition lawyer, generally, and has litigated numerous cases under both the Sherman and Lanham Acts. He is licensed in all Florida federal and state courts and routinely represents clients in Miami, Fort Lauderdale, West Palm Beach, Fort Myers, Tampa, Orlando and Jacksonville. His office can be reached at 954-332-2380. For more information, visit http://www.pollardllc.com.

Discussion

One thought on “Unilever Gets Egg On Its Face: Maker of Hellmann’s Sues Upstart Hampton Creek for False Advertising

  1. Thank you for excellent analysis of Unilever’s frivolous case–a deja vu for me as Unilever’s allegations are a deja vu of its strike suit, attempting to silence me as a whistleblower for their SKIPPY peanut butter fraud. Kudos to Hampton Creek and their counsel. High time Unilever and Hellman’s see the smelly egg on their faces.

    Joan Crosby Tibbetts
    President, Skippy, Inc.
    http://www.Skippy.com

    Altamonte Springs, FL 32714

    Posted by skippypal | December 27, 2014, 1:20 am

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Need a non-compete or trade secret attorney somewhere other than Florida? I have relationships with non-compete and trade secret attorneys throughout the country. Call my office at 954-332-2380.

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